Isaac storm surge could put $36 billion worth of homes at risk

Date:27-Aug-12Country: USAAuthor: Ben Berkowitz

The latest track of Tropical Storm Isaac puts more than $36 billion in Gulf Coast residential property at risk of flooding from storm surges, with southeastern Louisiana at greatest peril of huge losses, residential data analysis company CoreLogic said on Sunday.

Isaac bore down on the Florida Keys Sunday afternoon, with the latest National Hurricane Center forecasts suggesting a Mississippi landfall Wednesday morning as a Category 2 hurricane.

Some of the computer models used by meteorologists put Isaac on a more westerly track, though, bringing it directly into or just west of New Orleans.

Either way, CoreLogic said conditions were increasingly unfavorable along the Gulf Coast for storm surge, which is the water that a hurricane pushes forward as it moves toward land.

The firm estimated nearly 223,000 New Orleans-area properties worth $30.44 billion were vulnerable to flood damage from a Category 2 hurricane hitting the region. Across the broader Gulf Coast, more than 269,000 properties worth around $36 billion were endangered.

New Orleans is already highly susceptible to flooding because it is so low-lying; in 2005 Hurricane Katrina caused storm surges in excess of 25 feet.

"Unlike wind, homeowners and property owners can't mitigate against storm surge," said Howard Botts, a vice president at CoreLogic, in an interview Sunday.

Disaster modeler AIR Worldwide previously estimated Katrina ultimately caused more than $21 billion in storm surge losses, most of them uninsured, across three states.

The forecasts that suggest Isaac will make land west of the city actually amplify the problem, as winds are stronger and surge more intense on the storm's right side.

"So much of the city still lies below sea level, once you get water overtopping any of the protective structures, you're going to get a lot of properties impacted," Botts said.

Louisiana Citizens Property Insurance Corp., the state's insurer of last resort, has already stopped accepting new applications for coverage ahead of the storm, and the Federal Emergency Management Agency has deployed teams to the state.

FEMA's National Flood Insurance Program was wiped out by Katrina in 2005, requiring a bailout that has left the program with a debt load it may never retire. The program still has nearly 493,000 policies in force in Louisiana alone.

As a New Orleans meteorologist said on the city's WWL radio early Sunday, when asked about the impact Isaac could have on the city, "things (are) not looking the best for us."